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Exam 15: Using Management and Accounting Information

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Question 41

True/False

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A person who wishes to practice accounting as a CPA must pass an exam prepared by the American Institute of Certified Public Accountants (AICPA).

A) True
B) False

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Question 42

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The balance sheet is composed of

A) owners' equity,assets,and liabilities.
B) expenses,revenue,and net income.
C) revenue,expenses,and owners' equity.
D) assets,expenses,and net income.
E) assets,liabilities,and revenues.

F) C) and E)
G) C) and D)

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Question 43

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In what ways does the Sarbanes-Oxley Act improve the validity of the information provided by a firm's accounting system?

Kevin Smith is hired by Leslie Porter to help with budgeting,determining the costs of the firm's meal services,and recording transactions and creating financial statements.Kevin is a

Each month,Bath & Body Works pays employees wages,telephone bills,and salaries to accountants.These are all considered

​Most corporations include important elements of their financial statements ___ in their annual reports to permit readers to compare financial data.

Alfalfa Sprouts and Carrot Juice,LLC,a purveyor of health foods,healthy shakes and smoothies,buys local farm fresh organic fruits and vegetables,nuts and beans.It also buys organic breads and rolls for sandwiches.The business has a restaurant area where customers can sit,order via an electronic menu,and pay via the menu.The company invests half of all profit into stock in environmentally friendly corporations.It uses a portion of the remaining profit to make payments on the land where the store is located and periodically upgrades its equipment.Where would the information regarding the company's stock purchases,land purchase,and equipment purchases be found on the statement of cash flows?

Burlington offered its customers a reduction in price on some clothing items that were slightly faded from being in the window at the front of the store.This reduction is called a

Maddie is the CEO of Stevenson,Ross,and Warner (SRW) ,a regional accounting firm.SRW offers services in most areas of accounting,including auditing and consulting services.The firm must follow the GAAP rules,just like any other accounting firm.If there are information gaps that are not addressed and resolved by the firm,SRW could be considered a violator of the Sarbanes-Oxley Act.Maddie understands what must be done and wants every employee of the firm to understand that they have to follow all the rules and regulations.Like any other industry,accounting is a competitive industry and employees of accounting firms must be productive,progressive,and well trained. -Refer to Stevenson,Ross,and Warner.Which of the following represents a key component of the Sarbanes-Oxley Act relating to consulting services?

When Kenny applied for a loan to expand his sailboat business,the bank required that his financial statements be carefully examined by a CPA.The bank is requiring Kenny to have his financial statements

Nate Pride spent five years in an accounting educational program and successfully completed a rigorous accounting examination five years ago.Since then,he has worked for several accounting firms.Currently he is a senior partner in a huge international accounting firm.By profession,Nate is probably a

Assets = liabilities + owners' equity is the equation for information reported on the

General Motors decides to close one of its manufacturing plants in the Midwest.GM sells the facility to a new foreign automobile manufacturer.The money GM receives from this sale would belong in the ____ section of the statement of cash flows.

There is added protection for whistle-blowers who report violations of the Sarbanes-Oxley Act.

Debts owed by a business are called

The statement of financial position presents the business firm's assets,liabilities,and owners' equity accounts at the end of an accounting period,such as on December 31,whereas the income statement summarizes operations during a specified accounting period.

Merchandise that has been sold and is returned to the firm by the customer is called

The statement of cash flows for a business offers information on all of the following except

The ending cash balance reported on the statement of cash flows is the same as the net sales amount reported on the firm's income statement.

Commonly used in accounting analysis,a ____ shows a relationship between two elements of a firm's financial statements.